NorthEast munity Bancorp(NECB) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2025, was $11.9 million, a decrease of $821,000, or 6.5%, compared to $12.7 million for the same period in 2024 [156]. - Net income for the nine months ended September 30, 2025, was $33.6 million, a decrease of $3.2 million, or 8.8%, compared to $36.9 million for the same period in 2024 [180]. - Non-interest income decreased by $335,000, or 24.8%, to $1.0 million for the three months ended September 30, 2025, from $1.3 million for the same period in 2024 [165]. - Non-interest income for the nine months ended September 30, 2025, increased by $473,000, or 18.0%, to $3.1 million compared to $2.6 million for the same period in 2024 [191]. Income and Expenses - Net interest income decreased by $347,000, or 1.3%, to $25.9 million for the three months ended September 30, 2025, from $26.3 million for the same period in 2024 [157]. - Interest expense decreased by $1.6 million, or 10.5%, to $13.3 million for the three months ended September 30, 2025, from $14.9 million for the same period in 2024 [159]. - Non-interest expense increased by $390,000, or 3.9%, to $10.4 million for the three months ended September 30, 2025, from $10.0 million for the same period in 2024 [168]. - Non-interest expense rose by $2.3 million, or 8.0%, to $31.5 million for the nine months ended September 30, 2025, from $29.1 million in 2024 [194]. Assets and Liabilities - Total assets increased by $46.7 million, or 2.3%, to $2.1 billion at September 30, 2025, from $2.0 billion at December 31, 2024 [137]. - Loans, net of the allowance for credit losses, increased by $61.2 million, or 3.4%, to $1.9 billion at September 30, 2025, from $1.8 billion at December 31, 2024 [141]. - Total deposits decreased by $155.0 million, or 9.3%, to $1.5 billion at September 30, 2025, from $1.7 billion at December 31, 2024 [149]. - Stockholders' equity increased by $25.7 million, or 8.1%, to $344.0 million at September 30, 2025, from $318.3 million at December 31, 2024 [155]. Credit Quality - The allowance for credit losses related to loans decreased to $4.7 million as of September 30, 2025, from $4.8 million as of December 31, 2024 [143]. - Charge-offs increased to $678,000 during the nine months ended September 30, 2025, compared to $115,000 during the same period in 2024 [189]. - The net charge-offs for the nine months ended September 30, 2025, totaled $144,000, a decrease from $1,347,000 for the same period in 2024 [221]. - Non-performing assets decreased significantly to $545,000 at September 30, 2025, from $5.1 million at December 31, 2024, reflecting improved asset quality [215]. Liquidity - The company's liquidity ratios averaged 5.4% for Cash Liquidity, 7.7% for On Balance Sheet Liquidity, and 61.2% for On Balance Sheet Liquidity & Borrowing Capacity for the nine months ended September 30, 2025 [224]. - As of September 30, 2025, the Company's liquidity ratios were 71.1% for Cash and Borrowing Capacity/Total Non-Contractual Deposits and 95.5% for Cash, Borrowing Capacity and Sourced Deposits Capacity/Total Non-Contractual Deposits, indicating sufficient liquidity resources [232]. - The Company had an available borrowing limit of $740.2 million from the Federal Reserve Bank of New York as of September 30, 2025, down from $834.7 million at December 31, 2024 [238]. Interest Rate Risk - Net interest income is projected to increase by approximately 8.29% to 16.52% in a rising interest rate environment over a one-year time horizon, while it would decrease by approximately 9.05% to 18.24% in a declining interest rate environment [255]. - The Company has established an interest rate floor of zero percent for measuring interest rate risk, indicating a proactive approach to managing interest rate exposure [256]. Other Financial Metrics - The effective income tax rate was 28.5% for the three months ended September 30, 2025, compared to 27.8% for the same period in 2024 [179]. - The effective income tax rate for the nine months ended September 30, 2025, was 28.0%, slightly down from 28.1% in 2024 [205]. - The average interest-earning assets to interest-bearing liabilities ratio improved to 141.28% for the three months ended September 30, 2025 [208]. - The total loans outstanding increased to $1,873,598,000 as of September 30, 2025, compared to $1,812,598,000 at December 31, 2024 [219].